Getting Started As a Self-Managed Subscriber to the IC1 Service
In order to start
placing self-managed IC1 trades you will need to do the following:
1) We also autotrade the Time Decay and Dow Jones Long/Short Services. For more information about autotrading please go here.
2) Open a
Brokerage account that can handle options and also supports the capability to do
a 4 legged "condor" trade in a single transaction. We've heard that some
of the deep discount on-line brokers do not offer this capability. All of the autotrade brokers offered through MCTO have the ability to place
4 legged orders in a single transaction.
might have different terminology so you will need to check with them to make
sure you are able to place index credit spreads. All brokers will ask you to fill out a questionnaire asking about your level of
experience in trading options, and they will require a certain level of
options trading experience before they will grant you access (Level 2 is an example level required to trade complex options and spreads at TD Ameritrade). Brokers like to
see the applicant buying about 20 or more calls and puts per year and writing 30
or more credit spreads per year as their required threshold to grant
trading privileges. If you don't show any past options trading experience on the questionnaire, they
will not grant you trading privileges, and you will not be able to
execute any credit spreads that are recommended through this advisory. If you need more help on this please contact us.
3) We recommend to start small with
as little as $1000 in your trading account and then to slowly increase the size
of your account as you gain experience in the types of trades that we recommend.
to an options analysis package such as Optionetics Platinum or Platinum Express.
This software will allow you to visualize the risk/reward graph for each trade.
This is not absolutely necessary, but it is encouraged when trading credit
5) Link your
checking account to your brokerage account allowing you to easily transfer funds
back and forth. (ACH is the recommended type of linkage)
6) Have access
to additional funds for the two or three difficult months per year where we will
need to make adjustments to our trades to break even due to an unexpected surge
or drop in the market. MCTO recommends to have access to 25% of your
total active funds. For example, one who has $50k active in their options
brokerage account should have access to an additional $12.5k a couple of times per
year. An excellent source for these funds would be a Home Equity Line of Credit. If you do have a credit line, link your credit line into your brokerage account
or your checking account giving you an easy way to move funds back and
7) Set up an
excel spreadsheet to track your trades and Return on Investment. If you
would like the spreadsheet that the MCTO team uses,
to obtain the file.
8) Start out small and slowly add funds to your brokerage account as you gain experience and confidence with this particular options strategy....and don't give up. Learning and feeling comfortable with this strategy takes time and patience, but it's well worth the effort. And
by using the MCTO Advisory Service, you will reduce your learning curve dramatically and save
yourself a lot of money by avoiding costly mistakes.